Decentralized finance (DeFi) in Thailand
There is no specific laws or regulations governing DeFi activities in Thailand. However, the most relevant regulations governing DeFi is the Digital Asset Business Act of Thailand B.E. 2561 (2018) (“DAB”) which regulates offering and providing of services of digital assets, including cryptocurrencies and digital tokens. According to DAB, an issuance of digital tokens is required to be approved by the Office of the Security Exchange Commission (“SEC”). As a result, the issuer of digital tokens must disclose the required information and conduct initial coin offering (“ICO”) through the ICO Portal which is approved by the SEC.
If the nature of activity is considered as a type of digital asset business under DAB, it shall comply with DAB. Failure to comply with the rules will be regarded as an offence under DAB.
However, activities occurring in DeFi fall outside the scope of the digital asset business under the DAB, it will not be governed by the SEC which leads to current problems. This could be seen that the Thai Digital Asset Association (the “Association”) warned investors of the risks of investing on DeFi, as well as that the Association cannot act as an intermediary in a legal dispute after Genesis which is a Defi platform claimed that the Association would serve as intermediary in indemnification for any damage caused by fraud. In addition, some token holders said that they have not notified the SEC on this dispute because they knew that Defi platform was not regulated by the SEC.
Currently, it seems that there is no laws or regulations governing these DeFi activities, but in practice, if any activity involves a deceptive manner obtaining another person’s property, it may be deemed as a fraud or an offense under Cyber Security Maintenance Act (“CSM”), Electronic Transaction Act (“ETA”), and Anti- Money Laundering Act (“AMLA”).
Legal Insight Vol. August 2021 of Bangkok Global Law
The PDF file can be downloaded via the link as set below.